Incorporated in 2002, KBCL India Limited is a non-governmental organisation affiliated with the Kalpataru group. It is primarily engaged in agriculture and related activities.
KBCL India operated an illegal investment scheme under the guise of real estate operations. Depositors are offered a variety of options, including fixed deposits, monthly investment schemes, single investment schemes, recurring deposits, etc., under the guise of advances for unidentified real estate projects. Through these investments, the KBCL received over Rs 118.69 billion from investors for the purchase and development of land plots. The company deceived the gullible public, particularly in rural and semi-urban areas, with the promise of enormous returns and the option to rescind the land’s delivery.
How was the KBCL India Ltd. fraud uncovered?
SEBI, the capital market regulator, observed that KBCL’s scheme bears no resemblance to the real estate industry. After further investigation, SEBI determined that the company was operating an illegal collective investment scheme (CIS) without obligatory registration with the regulatory authority or approvals. The Securities and Exchange Board of India prohibits the company from raising any new capital or conducting any CIS transactions.
The Securities and Exchange Board of India demanded that KBCL refund investor funds within three months, along with the promised returns, on 26 May 2014. The capital market regulator also barred KBCL India and its directors (Rakesh Kumar, Sashi Kant Mishra, and Vishvnath Pratap Singh) from the securities market until all funds raised through CIS have been returned to investors.
SEBI also requested that KBCL and its directors refrain from selling properties and assets and from diverting funds raised from CIS. In addition, the SEBI prohibited KBCL from introducing any new schemes.
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Status of KBCL India Limited Refund
Even after a court ordered KBCL and its directors/promoters to refund investor funds, the company failed to pay its debts or respond to notices of demand. As a result, on November 10, 2016, recovery proceedings were initiated against KBCL India Ltd. and its directors for failing to pay investors the promised returns.
KBCL India Limited Recent Developments
According to the prohibitory order in the matter of KBCL India Ltd. issued on August 8, 2018, the company is not permitted to transfer, dispose of, or charge its immovable properties. The KBCL is also required to provide all pertinent information regarding its movable and immovable assets, as certified by the Board of Directors.
SEBI has not yet auctioned KBCL properties in order to initiate recovery procedures and reimburse investors.